from the many-ways-to-make-a-buck dept

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As part of our sponsorship program with the Application Developers Alliance, we're highlighting some of the content on DevsBuild.It, their new resource website, that we think will be most interesting to Techdirt readers.

In the sidebar widget featuring DevsBuild.It content, many of the most-read links have been those dealing with business models for apps, such as the developer who explained how their first game made $28,623 (the most popular post over the past month). For those of you following these kinds of stories, we're highlighting a few new additions to DevsBuild.It that aim to help developers with the task of monetizing an app.

First, there's a comparison tool that helps sort through all the different ad networks and other monetization platforms, filtering them by various criteria to help developers put together a smart business model:

To accompany the tool, there's also a free white paper on app monetization [pdf link] which compares different app stores (including the less-mainstream ones) and breaks the core monetization models down into
categories.

Finally, an early announcement: the Application Developers Alliance is hosting a series of events on app monetization, in San Francisco on August 2nd, New York on September 26th and LA on October 18th. More details are on the way.

Its latest misadventure into "controlling all things Nintendo" was brought to our attention via a post to Reddit's r/games by a prolific creator of Let's Play videos, Zack Scott. For whatever reason, Nintendo is performing a "mass claiming" of Let's Play videos featuring its titles. Scott notes in his post that Machinima has seen these claims increasing exponentially recently, pointing towards this being an active move on Nintendo's part.

As part of our on-going push to ensure Nintendo content is shared across social media channels in an appropriate and safe way, we became a YouTube partner and as such in February 2013 we registered our copyright content in the YouTube database. For most fan videos this will not result in any changes, however, for those videos featuring Nintendo-owned content, such as images or audio of a certain length, adverts will now appear at the beginning, next to or at the end of the clips. We continually want our fans to enjoy sharing Nintendo content on YouTube, and that is why, unlike other entertainment companies, we have chosen not to block people using our intellectual property.

For more information please visit http://www.youtube.com/yt/copyright/faq.html

A few observations on this statement:

1. In terms of the internet, the present will always be relegated to some distant point in the future for Nintendo. The fact that it took until three months ago for Nintendo to join forces with the world's largest video site is astounding. This is probably has something to do with Nintendo's recent shuttering of several Wii channels, many of which were underwhelming and ignored by a majority of its customers. (The "flagship" of the lineup -- the Nintendo channel -- was one of the worst, featuring haphazardly posted content that seemed to mistake throwing darts at a lineup for curation.)

2. Nintendo's self-consciously squeaky clean image? This IP grab is about that, too. Why else would a company that only recently decided YouTube might be a viable outlet use the phrase "shared... in appropriate and safe ways" to justify slapping ads on tons of pre-existing content uploaded by its customers and fans?

3. "...unlike other entertainment companies, we have chosen not to block people using our intellectual property." Good Guy Nintendo says No Blocking! While other "entertainment companies" have blocked thousands of videos, most video game companies don't. With the exception of Sega's promotional push for its new Shining Force title that took the form of widespread takedowns, most gaming companies take a more hands-off approach, realizing that Let's Play videos are a form of advertising that costs them nothing.

Nintendo is well within their rights to monetize these videos and images. But, as anyone who's had experience with situations like this can tell you, being "within your rights" isn't the same thing as "right," either in the moral sense or in the "opposite of wrong" sense.

Nintendo can (and does) monetize gameplay videos using its IP. There are some valid arguments for fair use that can be applied here (Techdirt contributor E. Zachary Knight runs down a few over at Gamasutra), but when it comes to uploaders v. content companies, the algorithm tends to side with the YouTube partner and the registered content. Once Nintendo makes this monetization claim, there's very little the uploaders can do to fight it.

On the plus side, Nintendo isn't actually taking down videos. This means uploaders may lose the income (many uploaders have never attempted to monetize their uploads), but their accounts will remain strike-free. (Unfortunately, having several videos from the same account claimed by ContentID tends not to reflect well on the account holder and will probably be taken into consideration should other infringement issues arise.)

The money gained from applying pre-roll/post-roll ads to Let's Play videos is likely insignificant in terms of Nintendo's annual income. (It's certainly not going to make up for the WiiU's rather inauspicious debut.) Nintendo's past IP battles make this more about control than income. This also builds Nintendo a useful database of "offending" titles that it can easily block or take down by doing nothing more than changing its ContentID options.

I think filing claims against LPers is backwards. Video games aren’t like movies or TV. Each play-through is a unique audiovisual experience. When I see a film that someone else is also watching, I don’t need to see it again. When I see a game that someone else is playing, I want to play that game for myself! Sure, there may be some people who watch games rather than play them, but are those people even gamers?

My viewers watch my gameplay videos for three main reasons:

1. To hear my commentary/review. 2. To learn about the game and how to play certain parts. 3. To see how I handle and react to certain parts of the game.

Since I started my gaming channel, I’ve played a lot of games. I love Nintendo, so I’ve included their games in my line-up. But until their claims are straightened out, I won’t be playing their games. I won’t because it jeopardizes my channel’s copyright standing and the livelihood of all LPers.

There are many better ways Nintendo could have handled this (a monetization split with uploaders, an invitation to upload to Nintendo's official channel, DOING NOTHING...), but the company's antagonistic attitude towards anything it doesn't directly profit from made this situation one of the better outcomes, unfortunately.

from the reddit,-Airbnb,-Dropbox,-Groupon,-Instagram,-Skype-and...-InstallMonetizer?? dept

Raise your hand if you love bundled toolbars and other assorted suspiciously-acting software installing itself on your computer when all you thought you were installing was a Java update or some other unrelated program. No, go ahead. Yeah... that's none of us.

Bundled toolbars and the like are considered "necessary evils" by those hoping to monetize something they're otherwise offering for free. But to the average computer user, they're annoying, devious bits of software that do fun things like hijack your default search or plant a row of links you'll never use in your Favorites bar. And that's when they're not doing more nefarious things, like delivering all sorts of browsing data to who knows where or, worse yet, running an unasked for "virus scan" and holding your computer hostage until you purchase the software from some shady third party.

Knowing the preceding to be an actual, provable fact, why on earth would respected entities in the tech community like Y Combinator and Andreessen Horowitz get in bed with a startup whose sole purpose is to "monetize" installs by bundling unwanted adware, toolbars or worse with its clients' programs?

Many people in the technology startup community have very high regards for Paul Graham and Y Combinator, the exclusive seed accelerator program in Silicon Valley which has under its belt acclaimed successes like reddit, Airbnb and Dropbox. There’s equal standing for Andreessen Horowitz, a private equity investment company with notable alumni such as Groupon, Instagram and Skype.

Now those people and companies have put their most valuable support – money, experience and brand – behind “InstallMonetizer“, a company that describes itself as a “windows based software monetization platform”. Very carefully selected words.

Now, there's nothing wrong with being a "software monetizer" who bundles products for clients with the software of others, other than the fact that your business method is highly unpopular with most computer users and that your financial success is usually dependent on the ignorance of those on the receiving end of opt-in/opt-out dialog boxes. In and of itself, not illegal or evil... just unwelcome.

Consumers Receiving Product Recommendations- We review the consumer’s pc for existing software. This is done to provide the consumer an advertiser software which they currently do not have installed on their computer. This information is not stored in order to maintain consumer’s privacy. We gather personally identifiable and may include information regarding your geo-location, ip address, operating system, language setting and information regarding whether recommended advertiser software has been accepted, downloaded, installed and any reason for failure installing. None of his information is personally identifiable.

So, all this information is/isn't gathered and is/isn't turned over to InstallMonetizer's clients, so there's nothing to worry about because the company takes rigorous security precautions...

We endeavor to take security measures to guard against unauthorized access to the systems where we store your data. This includes internal reviews of our data collection, storage, and processing practices and security measures and physical security measures.

and sends your unencrypted login data to you via a third party mailer...

Long doesn't question the fact that some software developers will find services like this a useful way to generate some additional income. What he does want to know is why respected entities like Y Combinator would back a startup that actively makes computing worse.

I’m not going to delve into the technical aspects of crapware – its effects on system performance, reliability and satisfaction are pretty well documented. The fact that there is a thriving ecosystem of “crapware, adware, spyware” removers is enough evidence it’s a significant issue.

Perhaps more importantly, I strongly believe crapware installers among other foul practices have eroded the trust of the Windows app ecosystem as a whole.

What used to be a fairly standard flow of app discovery has turned into a minefield of misleading download links on websites, defaulted checkboxes or sneaky install crapware buttons in position of “next” in wizards and browser homepage overrides. And it just takes one wrong click to have irreversible consequences.

Last but not least, disregarding the moral factor of this investment, I’m puzzled why such visionary investors would invest in a process that is slowly being phased out by changing industry practices...

I admit every person and company has the right to set their own moral compass, but it’s genuinely disappointing to see such respected and influential people and companies put their weight behind a practice that has undermined and continues to undermine the credibility of the Windows app ecosystem.

It's a good question. While no one expects VCs and accelerators to solely back conscionable startups, no one really expects those with stellar reputations to back a startup whose product is indistinguishable from hundreds of other shady installer packages standing between the end user and the product he or she actually wants.

InstallMonetizer claims it turns down 95% of applicants in order to keep it free of adware, spyware and malware, but just because the Yahoo! toolbar (to use one example) is none of the above doesn't make its uninvited presence in a string of opt-in/opt-out dialog boxes any more welcome. There are many ways to earn income while still providing a free product and there will be even more ways in the future. What's going on here isn't innovative. It's just another, slightly shinier version of something people are already sick of, and its questionable privacy policy quite possibly makes it no better (or different) than the others that have preceded it.

from the not-cool dept

We've talked in the past about how YouTube's ContentID system fails at fair use and the public domain -- whereby it is unable to distinguish public domain material. That has resulted in ridiculous situations, often where large companies with huge catalogs end up shutting down perfectly legal content. Sometimes it's crazy stuff like taking down a video because of birds chirping in the background, but other times it can result in public domain music being pulled down.

Musician Dave Colvin appears to be dealing with the latter, as he noted in a frustrated Facebook post about how the publishing arms of the major labels keep claiming copyright on public domain cover songs that he's been recording and posting to YouTube. The end result is that, even though all of these claims are bogus, YouTube is threatening to take away his ability to monetize his account, and have already disabled it on a public domain song.

I am fed up with YouTube. Several times I have provided evidence that my video "O Little Town of Bethlehem" is a Public Domain song and each time I get an email saying the song is owned by either Warner Chappell or UMPG or Sony. Now they have disabled my being able to earn any money for the number of times the video is viewed. We are only talking about pennies but no one "owns" a Public Domain song.

They now have threatened to totally disable my account from monetizing any of my videos because of multiple "false" claims of ownership. Since there is no way to speak to a human being directly, there will never be a way to convince them of the error of their ways....Fed up!

(And just to cut this argument off before it even begins: you can absolutely make money from public domain material, you just can't stop others from doing the same thing). Again, this isn't the first time we've seen this kind of thing, and it's a situation that YouTube really needs to figure out a solution to.

from the does-anyone-take-these-people-seriously? dept

One of the more annoying things about debates on copyright law, is that when we talk about alternative business models that do not rely on copyright, some people feel the need to insist that this means making less money -- or, even, making no money at all. There is just this assumption that an alternative business model means something along the lines of "give it away and pray," when nothing could be further from the truth. Yet this kind of thinking is so ingrained, that even in stories of artists making a ton of money, some maximalists simply assume that they're not making any money. We saw this recently in the comments to one of our recent posts about Jonathan Coulton which talks about how he made $500k last year -- at which point, someone said that such examples are useless since no one will pay.

It appears that Paramount's "Worldwide VP of Content Protection and Outreach" Al Perry also fits into the same unthinking mode. We've already discussed Perry's recent talk to Brooklyn Law School, but there was one section that caught my eye and deserves a separate post. It comes right at the beginning:

Perry opened by noting that one has to articulate a problem before seeking to solve it, and he refers to the problem as “content theft.” He pointed out that copyright law gives creators the right to monetize their creations, and that even if people like Louis C.K. decide not to do so, that’s a choice and not a requirement.

Now that seems bizarre and totally unsupportable. Remember, Louis CK made over $1 million in just a few days -- an amount that he admits was much higher than what he would have received just for a straight up performance. In what world does going direct-to-fans, building a good relationship, automatically mean no money made at all? Not the one we're based on.

from the now-that-I-have-your-attention... dept

Recently Spotify launched its app platform, a significant step into a future where music licensing can function like an API. Which of course should have been made possible a long time ago, but corporations' loss of control was preventing that until they finally found a way to out-leverage the indies - or maybe that's just a coincidence.

So recently we've been seeing a phenomenon I like to call the Rage Against The Stream, where artists & labels have been pulling their content from services like the aforementioned. I probably don't have to point out that in a reality where everyone is competing with free, attention has become more scarce and valuable than ever before and thus the categorical dismissal of access models such as subscription services is unlikely to pay off in the long run (p.s. I love understatements).

The day after Spotify launched its platform, articles started popping up, commenting on the fact that it's impossible to 'monetize apps' and there thus being "no clear upside to developers." And that's where I grab my BS-defense-stick and start drawing the line.

No, you can't put ads in your app.No, you can't charge for the app or create in-app purchases.No, Spotify doesn't give you part of the revenue of music streamed through your app.So?

Want to make money by building a Spotify app? Build one that uses Facebook Connect for user registration, focus on building a great experience that's non-obtrusive, make it easy to share this experience and funnel that back to your main platform (that's outside Spotify) - focus on discovery and then sell the premium. The SongKick app is a good example, but it can be applied in many more ways. Since it's going to be primarily power users and music geeks using the apps for now, items like vinyl copies come to mind. Focus on gaining & holding the attention - which is scarce, then build your way towards monetization by doing something that Spotify is not.

Spotify Apps are highly monetizable, you just have to be creative. Just like with music.

from the basic-economics-time... dept

There's been a lot of talk in the last year or so about the fact that the recording industry supposedly "missed an opportunity" to "monetize" online music a decade ago when it failed to come to an agreement on licensing with Napster. The idea was that Napster could have been iTunes, and people would be paying for music. That claim is made, yet again, in a CNN article about the decade since Napster, with a Forrester analyst claiming:

"That four-year lag [between Napster and iTunes] is where the music industry lost the battle," said Sonal Gandhi, music analyst with Forrester Research. "They lost an opportunity to take consumers' new behavior and really monetize it in a way that nipped the free music expectation in the bud."

That implies that if the industry had simply licensed its music online in 1999, rather than 2003, the dollars spent on recorded music would have remained propped up. I don't buy it. This ignores the fundamental economics of what's happening in the industry -- but, thankfully, some folks are noticing this. Matt Yglesias points out how wrong the claim by Forrester is, by noting that the market for recorded music was due for a correction just based on fundamental economics:

Music industry executives can tell themselves that as long as they want. But under conditions of perfect competition, the price of a song ought to be equal to the marginal cost of distributing a new copy of a song. Which is to say that the marginal cost ought to be $0. That's not a question of habit, you can look it up in all the leading textbooks. Of course real businesses rarely operate in circumstances of perfect competition, and record companies have a variety of political and legal tools they can deploy to try to protect monopoly rents. But this is hard to do. I think the real story with the iTunes store is that over time competitive pressure has impelled it to largely drop DRM and over time I expect we'll see that the CPI-adjusted price of songs declines.

Tim Lee, who pointed us to this piece in the first place, tacks on the point that "the economic argument for free music is unrelated to 'piracy.'" This is, indeed, a key point and one we've tried to make in the past, but one that sometimes gets lost in the shuffle. The basic economics of music suggest that it was going to face downward pricing pressure all along. That has little to do with unauthorized access to music or whether or not the major record labels sucked it up and did licensing deals with Napster. It was just where the market was going to head one way or the other -- because, over time, more and more people would begin to realize that free music was an excellent promotional tool for other things, and that would drive more business to those other areas. That, in turn, would lead more and more musicians and their business partners to recognize the benefit as well. In fact, we're seeing that happen today. The fact that unauthorized access to files online may have helped push that realization forward doesn't change the fact that those pressures were going to come one way or the other.

The recording industry may have missed a chance to slow down the decline in recorded music sales, but it hardly could have kept the numbers as artificially inflated as they used to be.

Separately, the CNN article is incredibly weak in that it makes the mistake of implying that the recording industry is the entire music industry. It completely ignores the fact that the overall music industry has actually been growing as sales of recorded music have dropped. People have just shifted their spending habits, and that likely would have happened whether or not any licensing deal had been worked out in 1999.

from the underpants-gnomes dept

The history of social-networking sites has largely been dominated by two trends: first, no matter how popular a site seems to be at any given moment, it's probably living on borrowed time. Second, no matter how much traffic a site pulls in, it's going to have a really hard time monetizing it. While the likes of Facebook and MySpace have resisted the former thus far, the latter remains a big problem -- as it has been for some time. Given this history, it's hardly surprising to see an NYT story this week about how little success marketers are having on sites like Facebook. They're finding that banner ads get ignored (again, unsurprising), while their efforts to do "social advertising" aren't bearing much fruit. The article mentions the Facebook page for Procter & Gamble's 2x Ultra Tide laundry detergent, which has attracted 471 fans, and 9 responses thus far to the question "Your Favorite Place to Get Stained?" It's hard to imagine what the P&G marketers expected, but it really doesn't seem surprising that people wouldn't flock to affiliate themselves with some laundry detergent. While some brands do attract that kind of attention, overall, the evidence says that people don't necessarily have a lot of interest in using social-networking sites to interact with brands, while many social-media efforts by companies aren't trusted and are seen as little more than shilling.

This is a big problem for social-networking sites as they continue to struggle to justify their massive valuations with real revenues. Part of the problem seems to be the marketers' mindset and how they see social networking or blogging as some magic sauce that will instantly boost sales and gloss over bad products. The challenge facing Facebook and its ilk is twofold. The sites need to better develop their marketing offerings beyond ineffective banner ads, but do so in a way that doesn't annoy users and trample their privacy, as they'll end up doing more to damage their advertisers' brands than boost them. But the bigger challenge is changing marketers' mindsets and getting them to understand how best to interact with users online. While the sites might see their role solely as selling advertising space, they must be the ones to take a leadership role and help educate and enlighten marketers, if only to help ensure their own survival.